Farmers National Banc Corp.

What they do

Farmers National Banc Corp. is a state commercial bank holding company headquartered in Canfield, Ohio, with common shares trading on NASDAQ under FMNB. It takes deposits and makes loans, primarily commercial, and also earns fee income from trust and fiduciary services, insurance agency commissions, retirement plan consulting and investment commissions. Its footprint covers Ohio and Pennsylvania, which the company describes as its growing markets.

Revenue drivers

• Net interest income (loans and securities) — The core bank earnings engine: total loans, net of allowance, were $4.72 billion at June 30, 2026 and securities available for sale were $1.47 billion, funded largely by $5.83 billion of deposits. Net interest margin was 3.44% in Q2 2026.
• Trust and fiduciary services — Fee income from fiduciary and trust activities, disclosed as a separate revenue line in the quarterly filing.
• Insurance agency commissions — Commission revenue from insurance agency operations, disclosed as a separate revenue category.
• Retirement plan consulting and investment commissions — Two additional separately disclosed noninterest income lines, alongside credit and debit card income.

Recent performance

Q2 2026 net income was $23.0 million, or $0.39 per diluted share, versus $13.9 million, or $0.37 per diluted share, in Q2 2025; adjusted net income excluding $1.7 million of acquisition and core conversion costs was $24.4 million, or $0.41 per share. Net interest margin rose to 3.44% in Q2 2026 from 3.12% in Q1 2026 and 2.91% in Q2 2025. Total assets were $7.14 billion at June 30, 2026, up from $5.25 billion at December 31, 2025, with Middlefield adding $1.82 billion in assets, $1.49 billion in loans and $1.49 billion in deposits at closing. Total loans declined from $4.75 billion at March 31 to $4.72 billion at June 30 on heavier-than-expected commercial payoffs from the Middlefield portfolio, and non-performing loans fell $15.2 million, or 25.4%, during the quarter.

Strategy

Management is integrating the March 2026 Middlefield acquisition and preparing for a core technology conversion it says remains on track for completion late in the third quarter. It highlighted $175.0 million of commercial lending fundings in Q2 2026, an 181% increase over the first quarter, and roughly $40.0 million of unfunded commercial balance growth since March. The stated goal is a stronger, more efficient and more scalable community banking platform across Ohio and Pennsylvania. It also purposefully shrank certain non-core deposits acquired from Middlefield.

Risks

• Acquisition integration and core conversion — The Middlefield integration and pending core technology conversion create execution risk; $1.7 million of Q2 2026 expense was tied to acquisition and core conversion costs.
• Commercial loan payoffs — Q2 2026 loans fell $0.03 billion from March on heavier-than-expected commercial payoffs from the Middlefield portfolio, which the company expects to normalize in Q3.
• Credit quality — Non-performing loans rose to $44.6 million at June 30, 2026 from $26.2 million at December 31, 2025 because of the Middlefield acquisition, even though they declined from the March level.
• Securities portfolio rate volatility — The company anticipates continued rate volatility in the bond market in 2026, which will continue to affect the value of its $1.47 billion available-for-sale securities portfolio.

Outlook

Management expects commercial loan payoffs to return to normal levels in the third quarter of 2026. It says the core technology conversion is on track to be completed late in the third quarter. It also expects continued rate volatility in the bond market in 2026 to keep affecting the securities portfolio's value.